Technical & Fundamental

Analysis on Stock

By CA. Ram Chandra Khanal

Technical & Fundamental Analysis……….

Fundamental analysis: Companies are selected for in-depth analysis based on primary

financial indicators published by the respective companies. Maximum possible number of companies need to be considered Stock prices of companies with good financial conditions need to be

compared with the valuation result Appropriate companies based on valuation and market price need to

be considered for investment portfolio Companies with good financial conditions but market price is higher

are placed in watch list

Technical Analysis is done to identify the best timing for market entry and exit

Analysis of international companies in sectoral basis are also made to get the feel of our market valuation

Technical and Fundamental….

Collection of data :

Primary Sources as well as from secondary sources (i.e.

newspapers, publications and various websites)

Major reports are audited reports, quarterly reports,

directives and circulars published by Nepal government,

NRB, Insurance Board, and other regulatory bodies.

Apart from domestic financial data, we need to see yearly

analysis of international prospects to know general outline.

Research Process

Various tabulations should be created based upon the nature

of the data that are collected.

As for example for overall snapshot of financial indicators of

companies, a excel sheet can be generated as:

The table is prepared with year wise data of every companies,

in sector classification as per NEPSE, which helps in further

classification of companies.

Comp

any

Net

Profit

Net

worth

ROE EPS DPS Div

Yield

PB PE

FY.. FY.. FY.. FY.. FY.. FY.. FY.. FY..

Research Process

Apart from financial snapshot of companies, also the

quarterly reports and audited reports are keyed in excel

format as published for further analysis.

Also, the book closure notices, dividend declaration notices,

AGM notices and other notices are properly taken into

consideration and need to checked before investments.

Also a separate sheet is prepared for technical past data as

total trading days, number of trades, market capitalization,

turnover to market and so on to find out the market liquidity

of the stocks.

Research Analysis – Risk / Return

Also fundamental risk and return of the individual companies

are sought out based upon the past dividend, to evaluate the

per unit risk of the return expected. Used to determine the

risk return trade off.

The financial snapshot is extensively used for filtering

companies for investment with objectives as value, growth

and trading

Technical Analysis of NEPSE

NEPSE chart

661.78

292.32 301.3

432.82

555.93

536.2

578.68

656.75677.8

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4 Jan 09- 15 Jan 14

THANK YOU